| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware
|
20-3068069
|
(State or other jurisdiction
of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
111 Westwood Place, Suite 400, Brentwood, Tennessee
|
37027
|
|
(Address of principal executive offices)
|
(Zip Code)
|
|
|
Large accelerated filer
|
Accelerated filer
|
|
Non-accelerated filer
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
|
PAGE
|
|
PART I.
|
FINANCIAL INFORMATION
|
|
|
|
|
Item 1.
|
Financial Statements
|
|
|
|
|
|
Condensed Consolidated Balance Sheets -
|
|
|
As of June 30, 2016 (Unaudited) and December 31, 2015
|
3
|
|
|
|
|
Condensed Consolidated Statements of Operations -
|
|
|
Three and six months ended June 30, 2016 and 2015 (Unaudited)
|
4
|
|
|
|
|
Condensed Consolidated Statement of Equity -
|
|
|
Six months ended June 30, 2016 (Unaudited)
|
5
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows -
|
|
|
Six months ended June 30, 2016 and 2015 (Unaudited)
|
6
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements (Unaudited)
|
7
|
|
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
18
|
|
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
39
|
|
|
|
Item 4.
|
Controls and Procedures
|
40
|
|
|
|
|
|
|
PART II.
|
OTHER INFORMATION
|
|
|
|
|
Item 1.
|
Legal Proceedings
|
40
|
|
|
|
Item 1A.
|
Risk Factors
|
40
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
41
|
|
|
|
Item 6.
|
Exhibits
|
41
|
|
|
|
Signatures
|
|
42
|
|
June 30,
2016
|
December 31,
2015
|
||||||
Assets
|
(Unaudited)
|
|||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$
|
39,053
|
$
|
88,029
|
||||
Cash and escrow deposits – restricted
|
32,343
|
32,570
|
||||||
Accounts receivable, net
|
138,614
|
144,053
|
||||||
Assets held for sale
|
354,565
|
110,620
|
||||||
Prepaid expenses and other current assets, net
|
137,011
|
122,671
|
||||||
Total current assets
|
701,586
|
497,943
|
||||||
Property, plant and equipment and leasehold intangibles, net
|
7,691,478
|
8,031,376
|
||||||
Cash and escrow deposits – restricted
|
33,254
|
33,382
|
||||||
Investment in unconsolidated ventures
|
372,961
|
371,639
|
||||||
Goodwill
|
697,128
|
725,696
|
||||||
Other intangible assets, net
|
115,134
|
129,186
|
||||||
Other assets, net
|
260,791
|
259,342
|
||||||
Total assets
|
$
|
9,872,332
|
$
|
10,048,564
|
||||
Liabilities and Equity
|
||||||||
Current liabilities
|
||||||||
Current portion of long-term debt
|
$
|
265,854
|
$
|
173,454
|
||||
Current portion of capital and financing lease obligations
|
66,697
|
62,150
|
||||||
Trade accounts payable
|
78,153
|
128,006
|
||||||
Accrued expenses
|
384,444
|
372,874
|
||||||
Refundable entrance fees and deferred revenue
|
98,525
|
99,277
|
||||||
Tenant security deposits
|
4,425
|
4,387
|
||||||
Total current liabilities
|
898,098
|
840,148
|
||||||
Long-term debt, less current portion
|
3,442,801
|
3,459,371
|
||||||
Capital and financing lease obligations, less current portion
|
2,425,850
|
2,427,438
|
||||||
Line of credit
|
186,500
|
310,000
|
||||||
Deferred liabilities
|
260,668
|
266,537
|
||||||
Deferred tax liability
|
69,382
|
69,051
|
||||||
Other liabilities
|
195,582
|
217,292
|
||||||
Total liabilities
|
7,478,881
|
7,589,837
|
||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized at June 30, 2016 and December 31, 2015; no shares issued and outstanding
|
—
|
—
|
||||||
Common stock, $0.01 par value, 400,000,000 shares authorized at June 30, 2016 and December 31, 2015; 193,271,741 and 190,767,191 shares issued and 190,843,340 and 188,338,790 shares outstanding (including 4,942,624 and 3,453,991 unvested restricted shares), respectively
|
1,908
|
1,883
|
||||||
Additional paid-in-capital
|
4,088,290
|
4,069,283
|
||||||
Treasury stock, at cost; 2,428,401 shares at June 30, 2016 and December 31, 2015
|
(46,800
|
)
|
(46,800
|
)
|
||||
Accumulated deficit
|
(1,649,703
|
)
|
(1,565,478
|
)
|
||||
Total Brookdale Senior Living Inc. stockholders' equity
|
2,393,695
|
2,458,888
|
||||||
Noncontrolling interest
|
(244
|
)
|
(161
|
)
|
||||
Total equity
|
2,393,451
|
2,458,727
|
||||||
Total liabilities and equity
|
$
|
9,872,332
|
$
|
10,048,564
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
Revenue
|
||||||||||||||||
Resident fees
|
$
|
1,054,568
|
$
|
1,043,978
|
$
|
2,115,716
|
$
|
2,096,210
|
||||||||
Management fees
|
18,186
|
14,839
|
34,966
|
29,936
|
||||||||||||
Reimbursed costs incurred on behalf of managed communities
|
186,076
|
179,367
|
371,304
|
359,919
|
||||||||||||
Total revenue
|
1,258,830
|
1,238,184
|
2,521,986
|
2,486,065
|
||||||||||||
|
||||||||||||||||
Expense
|
||||||||||||||||
Facility operating expense (excluding depreciation and amortization of $118,808, $214,116, $232,911 and $422,939, respectively)
|
693,103
|
694,991
|
1,409,005
|
1,391,880
|
||||||||||||
General and administrative expense (including non-cash stock-based compensation expense of $8,994, $6,851, $18,763 and $15,724, respectively)
|
90,695
|
89,545
|
183,316
|
179,075
|
||||||||||||
Transaction costs
|
441
|
421
|
1,291
|
7,163
|
||||||||||||
Facility lease expense
|
92,682
|
91,338
|
189,371
|
185,809
|
||||||||||||
Depreciation and amortization
|
133,394
|
225,645
|
260,531
|
446,072
|
||||||||||||
Asset impairment
|
4,152
|
—
|
7,527
|
—
|
||||||||||||
Loss on facility lease termination
|
—
|
—
|
—
|
76,143
|
||||||||||||
Costs incurred on behalf of managed communities
|
186,076
|
179,367
|
371,304
|
359,919
|
||||||||||||
Total operating expense
|
1,200,543
|
1,281,307
|
2,422,345
|
2,646,061
|
||||||||||||
Income (loss) from operations
|
58,287
|
(43,123
|
)
|
99,641
|
(159,996
|
)
|
||||||||||
|
||||||||||||||||
Interest income
|
728
|
382
|
1,430
|
809
|
||||||||||||
Interest expense:
|
||||||||||||||||
Debt
|
(43,731
|
)
|
(43,684
|
)
|
(87,721
|
)
|
(86,032
|
)
|
||||||||
Capital and financing lease obligations
|
(50,581
|
)
|
(53,043
|
)
|
(101,160
|
)
|
(106,246
|
)
|
||||||||
Amortization of deferred financing costs and debt premium (discount)
|
(2,288
|
)
|
162
|
(4,598
|
)
|
(219
|
)
|
|||||||||
Change in fair value of derivatives
|
(4
|
)
|
(76
|
)
|
(28
|
)
|
(626
|
)
|
||||||||
Debt modification and extinguishment costs
|
(186
|
)
|
—
|
(1,296
|
)
|
(44
|
)
|
|||||||||
Equity in earnings (loss) of unconsolidated ventures
|
338
|
(672
|
)
|
1,356
|
812
|
|||||||||||
Other non-operating income
|
2,069
|
2,654
|
9,856
|
5,145
|
||||||||||||
Income (loss) before income taxes
|
(35,368
|
)
|
(137,400
|
)
|
(82,520
|
)
|
(346,397
|
)
|
||||||||
(Provision) benefit for income taxes
|
(123
|
)
|
52,593
|
(1,788
|
)
|
130,881
|
||||||||||
Net income (loss)
|
(35,491
|
)
|
(84,807
|
)
|
(84,308
|
)
|
(215,516
|
)
|
||||||||
Net (income) loss attributable to noncontrolling interest
|
41
|
260
|
83
|
518
|
||||||||||||
Net income (loss) attributable to Brookdale Senior Living Inc. common stockholders
|
$
|
(35,450
|
)
|
$
|
(84,547
|
)
|
$
|
(84,225
|
)
|
$
|
(214,998
|
)
|
||||
|
||||||||||||||||
Basic and diluted net income (loss) per share attributable to Brookdale Senior Living Inc. common stockholders
|
$
|
(0.19
|
)
|
$
|
(0.46
|
)
|
$
|
(0.45
|
)
|
$
|
(1.17
|
)
|
||||
|
||||||||||||||||
Weighted average shares used in computing basic and diluted net income (loss) per share
|
185,825
|
184,266
|
185,489
|
183,974
|
|
Common Stock
|
|||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Additional
Paid-In-
Capital
|
Treasury
Stock
|
Accumulated
Deficit
|
Stockholders'
Equity
|
Noncontrolling
Interest
|
Total Equity
|
||||||||||||||||||||||||
Balances at January 1, 2016
|
188,339
|
$
|
1,883
|
$
|
4,069,283
|
$
|
(46,800
|
)
|
$
|
(1,565,478
|
)
|
$
|
2,458,888
|
$
|
(161
|
)
|
$
|
2,458,727
|
||||||||||||||
Compensation expense related to restricted stock grants
|
—
|
—
|
18,763
|
—
|
—
|
18,763
|
—
|
18,763
|
||||||||||||||||||||||||
Net income (loss)
|
—
|
—
|
—
|
—
|
(84,225
|
)
|
(84,225
|
)
|
(83
|
)
|
(84,308
|
)
|
||||||||||||||||||||
Issuance of common stock under Associate Stock Purchase Plan
|
84
|
1
|
1,174
|
—
|
—
|
1,175
|
—
|
1,175
|
||||||||||||||||||||||||
Restricted stock, net
|
2,488
|
25
|
(25
|
)
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||
Other
|
(68
|
)
|
(1
|
)
|
(905
|
)
|
—
|
—
|
(906
|
)
|
—
|
(906
|
)
|
|||||||||||||||||||
Balances at June 30, 2016
|
190,843
|
$
|
1,908
|
$
|
4,088,290
|
$
|
(46,800
|
)
|
$
|
(1,649,703
|
)
|
$
|
2,393,695
|
$
|
(244
|
)
|
$
|
2,393,451
|
|
Six Months Ended
June 30,
|
|||||||
|
2016
|
2015
|
||||||
Cash Flows from Operating Activities
|
||||||||
Net income (loss)
|
$
|
(84,308
|
)
|
$
|
(215,516
|
)
|
||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||
Loss on extinguishment of debt, net
|
139
|
44
|
||||||
Depreciation and amortization, net
|
265,129
|
446,291
|
||||||
Asset impairment
|
7,527
|
—
|
||||||
Equity in earnings of unconsolidated ventures
|
(1,356
|
)
|
(812
|
)
|
||||
Distributions from unconsolidated ventures from cumulative share of net earnings
|
—
|
1,450
|
||||||
Amortization of deferred gain
|
(2,186
|
)
|
(2,186
|
)
|
||||
Amortization of entrance fee revenue
|
(1,939
|
)
|
(1,697
|
)
|
||||
Proceeds from deferred entrance fee revenue
|
7,458
|
5,313
|
||||||
Deferred income tax provision (benefit)
|
332
|
(132,462
|
)
|
|||||
Change in deferred lease liability
|
3,412
|
4,720
|
||||||
Change in fair value of derivatives
|
28
|
626
|
||||||
Gain on sale of assets
|
(2,551
|
)
|
—
|
|||||
Non-cash stock-based compensation
|
18,763
|
15,724
|
||||||
Non-cash interest expense on financing lease obligations
|
13,014
|
11,516
|
||||||
Amortization of (above) below market lease, net
|
(3,466
|
)
|
(3,799
|
)
|
||||
Other
|
(3,597
|
)
|
(1,416
|
)
|
||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable, net
|
5,439
|
(12,241
|
)
|
|||||
Prepaid expenses and other assets, net
|
(16,845
|
)
|
37,493
|
|||||
Accounts payable and accrued expenses
|
(23,133
|
)
|
(49,536
|
)
|
||||
Tenant refundable fees and security deposits
|
38
|
(517
|
)
|
|||||
Deferred revenue
|
(4,059
|
)
|
7,829
|
|||||
Net cash provided by operating activities
|
177,839
|
110,824
|
||||||
|
||||||||
Cash Flows from Investing Activities
|
||||||||
(Increase) decrease in lease security deposits and lease acquisition deposits, net
|
(1,538
|
)
|
15,723
|
|||||
Decrease in cash and escrow deposits — restricted
|
355
|
10,206
|
||||||
Additions to property, plant and equipment and leasehold intangibles, net
|
(190,060
|
)
|
(178,348
|
)
|
||||
Acquisition of assets, net of related payables
|
(12,157
|
)
|
(192,701
|
)
|
||||
Investment in unconsolidated ventures
|
(3,733
|
)
|
(38,609
|
)
|
||||
Distributions received from unconsolidated ventures
|
3,602
|
—
|
||||||
Proceeds from sale of assets, net
|
45,584
|
4,993
|
||||||
Other
|
1,211
|
2,239
|
||||||
Net cash used in investing activities
|
(156,736
|
)
|
(376,497
|
)
|
||||
|
||||||||
Cash Flows from Financing Activities
|
||||||||
Proceeds from debt
|
192,128
|
165,193
|
||||||
Repayment of debt and capital and financing lease obligations
|
(128,427
|
)
|
(84,037
|
)
|
||||
Proceeds from line of credit
|
894,500
|
685,000
|
||||||
Repayment of line of credit
|
(1,018,000
|
)
|
(515,000
|
)
|
||||
Payment of financing costs, net of related payables
|
(641
|
)
|
(3,466
|
)
|
||||
Refundable entrance fees:
|
||||||||
Proceeds from refundable entrance fees
|
1,146
|
586
|
||||||
Refunds of entrance fees
|
(1,745
|
)
|
(1,817
|
)
|
||||
Cash portion of loss on extinguishment of debt
|
—
|
(44
|
)
|
|||||
Payment on lease termination
|
(9,250
|
)
|
(7,750
|
)
|
||||
Other
|
210
|
1,421
|
||||||
Net cash (used in) provided by financing activities
|
(70,079
|
)
|
240,086
|
|||||
Net decrease in cash and cash equivalents
|
(48,976
|
)
|
(25,587
|
)
|
||||
Cash and cash equivalents at beginning of period
|
88,029
|
104,083
|
||||||
Cash and cash equivalents at end of period
|
$
|
39,053
|
$
|
78,496
|
|
Shares Granted
|
Value Per Share
|
Total Value
|
|||||||||
Three months ended March 31, 2016
|
2,855
|
$
|
14.49 – 18.46
|
$
|
41,371
|
|||||||
Three months ended June 30, 2016
|
115
|
$
|
15.68 – 18.03
|
$
|
2,058
|
|
June 30, 2016
|
December 31, 2015
|
||||||||||||||||||||||
|
Gross
Carrying
Amount
|
Dispositions and Other Reductions
|
Net
|
Gross
Carrying
Amount
|
Dispositions and Other Reductions
|
Net
|
||||||||||||||||||
Retirement Centers
|
$
|
28,141
|
$
|
(820
|
)
|
$
|
27,321
|
$
|
28,141
|
$
|
(721
|
)
|
$
|
27,420
|
||||||||||
Assisted Living
|
591,814
|
(48,817
|
)
|
542,997
|
591,814
|
(20,348
|
)
|
571,466
|
||||||||||||||||
Brookdale Ancillary Services
|
126,810
|
—
|
126,810
|
126,810
|
—
|
126,810
|
||||||||||||||||||
Total
|
$
|
746,765
|
$
|
(49,637
|
)
|
$
|
697,128
|
$
|
746,765
|
$
|
(21,069
|
)
|
$
|
725,696
|
|
June 30, 2016
|
December 31, 2015
|
||||||||||||||||||||||
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
|
||||||||||||||||||
Community purchase options
|
$
|
32,970
|
$
|
—
|
$
|
32,970
|
$
|
40,270
|
$
|
—
|
$
|
40,270
|
||||||||||||
Health care licenses
|
66,612
|
—
|
66,612
|
66,612
|
—
|
66,612
|
||||||||||||||||||
Trade names
|
27,800
|
(19,224
|
)
|
8,576
|
27,800
|
(14,209
|
)
|
13,591
|
||||||||||||||||
Other
|
13,531
|
(6,555
|
)
|
6,976
|
13,531
|
(4,818
|
)
|
8,713
|
||||||||||||||||
Total
|
$
|
140,913
|
$
|
(25,779
|
)
|
$
|
115,134
|
$
|
148,213
|
$
|
(19,027
|
)
|
$
|
129,186
|
|
June 30,
2016
|
December 31,
2015
|
||||||
Land
|
$
|
454,263
|
$
|
486,567
|
||||
Buildings and improvements
|
5,120,742
|
5,260,826
|
||||||
Leasehold improvements
|
116,810
|
100,430
|
||||||
Furniture and equipment
|
937,658
|
895,447
|
||||||
Resident and leasehold operating intangibles
|
765,859
|
783,434
|
||||||
Construction in progress
|
83,552
|
138,054
|
||||||
Assets under capital and financing leases
|
2,933,330
|
2,909,653
|
||||||
|
10,412,214
|
10,574,411
|
||||||
Accumulated depreciation and amortization
|
(2,720,736
|
)
|
(2,543,035
|
)
|
||||
Property, plant and equipment and leasehold intangibles, net
|
$
|
7,691,478
|
$
|
8,031,376
|
(dollars in thousands):
|
Six Months Ended
June 30,
|
|||||||
|
2016
|
2015
|
||||||
Supplemental Disclosure of Cash Flow Information:
|
||||||||
Interest paid
|
$
|
175,386
|
$
|
179,238
|
||||
Income taxes paid
|
$
|
1,997
|
$
|
2,386
|
||||
Additions to property, plant and equipment and leasehold intangibles, net:
|
||||||||
Property, plant and equipment and leasehold intangibles, net
|
$
|
158,841
|
$
|
178,348
|
||||
Accounts payable
|
31,219
|
—
|
||||||
Net cash paid
|
$
|
190,060
|
$
|
178,348
|
||||
Acquisition of assets, net of related payables:
|
||||||||
Prepaid expenses and other assets
|
$
|
—
|
$
|
(51,506
|
)
|
|||
Property, plant and equipment and leasehold intangibles, net
|
19,457
|
196,196
|
||||||
Other intangible assets, net
|
(7,300
|
)
|
(7,293
|
)
|
||||
Capital and financing lease obligations
|
—
|
75,619
|
||||||
Long-term debt
|
—
|
(20,000
|
)
|
|||||
Other liabilities
|
—
|
(315
|
)
|
|||||
Net cash paid
|
$
|
12,157
|
$
|
192,701
|
||||
Proceeds from sale of assets, net:
|
||||||||
Assets held for sale
|
$
|
42,714
|
$
|
—
|
||||
Prepaid expenses and other assets
|
319
|
4,993
|
||||||
Gain on sale of assets
|
2,551
|
—
|
||||||
Net cash received
|
$
|
45,584
|
$
|
4,993
|
||||
Supplemental Schedule of Non-cash Operating, Investing and Financing Activities:
|
||||||||
Capital and financing leases:
|
||||||||
Property, plant and equipment and leasehold intangibles, net
|
$
|
—
|
$
|
13,718
|
||||
Other intangible assets, net
|
—
|
(5,202
|
)
|
|||||
Capital and financing lease obligations
|
—
|
(10,812
|
)
|
|||||
Other liabilities
|
—
|
2,296
|
||||||
Net
|
$
|
—
|
$
|
—
|
||||
Assets designated as held for sale:
|
||||||||
Property, plant and equipment and leasehold intangibles, net
|
$
|
(261,639
|
)
|
$
|
—
|
|||
Assets held for sale
|
288,659
|
—
|
||||||
Prepaid expenses and other assets
|
(836
|
)
|
—
|
|||||
Goodwill
|
(28,568
|
)
|
—
|
|||||
Asset impairment
|
2,384
|
—
|
||||||
Net
|
$
|
—
|
$
|
—
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
Cash basis payment
|
$
|
96,031
|
$
|
92,352
|
$
|
191,611
|
$
|
187,074
|
||||||||
Straight-line (income) expense
|
(523
|
)
|
1,919
|
3,412
|
4,720
|
|||||||||||
Amortization of (above) below market lease, net
|
(1,733
|
)
|
(1,840
|
)
|
(3,466
|
)
|
(3,799
|
)
|
||||||||
Amortization of deferred gain
|
(1,093
|
)
|
(1,093
|
)
|
(2,186
|
)
|
(2,186
|
)
|
||||||||
Facility lease expense
|
$
|
92,682
|
$
|
91,338
|
$
|
189,371
|
$
|
185,809
|
VIE Type
|
Asset Type
|
Maximum Exposure to Loss
|
Carrying Amount
|
||||||
CCRC Venture opco
|
Investment in unconsolidated ventures
|
$
|
177.5
|
$
|
177.5
|
||||
RIDEA Ventures
|
Investment in unconsolidated ventures
|
$
|
123.4
|
$
|
123.4
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
Revenue
|
||||||||||||||||
Retirement Centers
(1)
|
$
|
169,990
|
$
|
164,409
|
$
|
339,416
|
$
|
327,895
|
||||||||
Assisted Living
(1)
|
613,017
|
611,838
|
1,230,287
|
1,229,182
|
||||||||||||
CCRCs - Rental
(1)
|
148,225
|
151,561
|
300,485
|
307,552
|
||||||||||||
Brookdale Ancillary Services
(1)
|
123,336
|
116,170
|
245,528
|
231,581
|
||||||||||||
Management Services
(2)
|
204,262
|
194,206
|
406,270
|
389,855
|
||||||||||||
|
$
|
1,258,830
|
$
|
1,238,184
|
$
|
2,521,986
|
$
|
2,486,065
|
||||||||
Segment Operating Income
(3)
|
||||||||||||||||
Retirement Centers
|
$
|
74,754
|
$
|
72,044
|
$
|
149,203
|
$
|
142,568
|
||||||||
Assisted Living
|
234,085
|
223,359
|
454,895
|
446,865
|
||||||||||||
CCRCs - Rental
|
33,594
|
35,860
|
69,063
|
74,431
|
||||||||||||
Brookdale Ancillary Services
|
19,032
|
17,724
|
33,550
|
40,466
|
||||||||||||
Management Services
|
18,186
|
14,839
|
34,966
|
29,936
|
||||||||||||
|
379,651
|
363,826
|
741,677
|
734,266
|
||||||||||||
General and administrative (including non-cash stock-based compensation expense)
|
90,695
|
89,545
|
183,316
|
179,075
|
||||||||||||
Transaction costs
|
441
|
421
|
1,291
|
7,163
|
||||||||||||
Facility lease expense
|
92,682
|
91,338
|
189,371
|
185,809
|
||||||||||||
Depreciation and amortization
|
133,394
|
225,645
|
260,531
|
446,072
|
||||||||||||
Asset impairment
|
4,152
|
—
|
7,527
|
—
|
||||||||||||
Loss on facility lease termination
|
—
|
—
|
—
|
76,143
|
||||||||||||
Income (loss) from operations
|
$
|
58,287
|
$
|
(43,123
|
)
|
$
|
99,641
|
$
|
(159,996
|
)
|
|
As of
|
|||||||
|
June 30,
2016
|
December 31,
2015
|
||||||
Total assets
|
||||||||
Retirement Centers
|
$
|
1,537,614
|
$
|
1,556,169
|
||||
Assisted Living
|
6,248,956
|
6,354,415
|
||||||
CCRCs - Rental
|
1,018,017
|
1,037,384
|
||||||
Brookdale Ancillary Services
|
281,392
|
292,540
|
||||||
Corporate and Management Services
|
786,353
|
808,056
|
||||||
Total assets
|
$
|
9,872,332
|
$
|
10,048,564
|
(1) | All revenue is earned from external third parties in the United States. |
(2) | Management services segment revenue includes reimbursements for which the Company is the primary obligor of costs incurred on behalf of managed communities. |
(3) | Segment operating income is defined as segment revenues less segment facility operating expenses (excluding depreciation and amortization). |
•
|
As of December 31, 2015, we identified 17 owned communities as assets held for sale. During the three months ended March 31, 2016, we sold seven of these communities comprised of 748 units for an aggregate selling price of $46.7 million, and the results of operations of these communities are reported in the Assisted Living and CCRCs – Rental segments within the condensed consolidated financial statements through the disposition dates. The remaining ten communities are classified as held for sale as of June 30, 2016.
|
•
|
During the three months ended June 30, 2016, we entered into an agreement with a third party to sell a 12-state portfolio of 44 owned communities for a sales price of $252.5 million. These 44 communities were classified as held for sale as of June 30, 2016.
|
•
|
During the three months ended June 30, 2016, we entered into agreements with other third parties to sell six owned communities for an aggregate sales price of $42.4 million. These six communities were classified as held for sale as of June 30, 2016.
|
Three Months Ended
June 30,
|
Increase
(Decrease)
|
|||||||||||||||
2016
|
2015
|
Amount
|
Percent
|
|||||||||||||
Total revenues
|
$
|
1,258.8
|
$
|
1,238.2
|
$
|
20.6
|
1.7
|
%
|
||||||||
Facility operating expense
|
$
|
693.1
|
$
|
695.0
|
$
|
(1.9
|
)
|
(0.3
|
)%
|
|||||||
Net income (loss)
|
$
|
(35.5
|
)
|
$
|
(84.8
|
)
|
$
|
(49.3
|
)
|
(58.2
|
)%
|
|||||
Net income (loss) attributable to Brookdale Senior Living Inc. common stockholders
|
$
|
(35.5
|
)
|
$
|
(84.5
|
)
|
$
|
(49.1
|
)
|
(58.1
|
)%
|
|||||
Adjusted EBITDA
|
$
|
201.5
|
$
|
188.4
|
$
|
13.1
|
7.0
|
%
|
||||||||
Net cash provided by operating activities
|
$
|
107.5
|
$
|
100.8
|
$
|
6.7
|
6.7
|
%
|
||||||||
Cash From Facility Operations
|
$
|
106.1
|
$
|
80.9
|
$
|
25.1
|
31.1
|
%
|
Six Months Ended
June 30,
|
Increase
(Decrease)
|
|||||||||||||||
2016
|
2015
|
Amount
|
Percent
|
|||||||||||||
Total revenues
|
$
|
2,522.0
|
$
|
2,486.1
|
$
|
35.9
|
1.4
|
%
|
||||||||
Facility operating expense
|
$
|
1,409.0
|
$
|
1,391.9
|
$
|
17.1
|
1.2
|
%
|
||||||||
Net income (loss)
|
$
|
(84.3
|
)
|
$
|
(215.5
|
)
|
$
|
(131.2
|
)
|
(60.9
|
)%
|
|||||
Net income (loss) attributable to Brookdale Senior Living Inc. common stockholders
|
$
|
(84.2
|
)
|
$
|
(215.0
|
)
|
$
|
(130.8
|
)
|
(60.8
|
)%
|
|||||
Adjusted EBITDA
|
$
|
384.2
|
$
|
376.7
|
$
|
7.5
|
2.0
|
%
|
||||||||
Net cash provided by operating activities
|
$
|
177.8
|
$
|
110.8
|
$
|
67.0
|
60.5
|
%
|
||||||||
Cash From Facility Operations
|
$
|
192.2
|
$
|
169.0
|
$
|
23.2
|
13.7
|
%
|
(dollars in thousands, except average monthly revenue per unit)
|
Three Months Ended
June 30,
|
|||||||||||||||
|
2016
|
2015
|
Increase
(Decrease)
|
% Increase
(Decrease)
|
||||||||||||
Statement of Operations Data:
|
||||||||||||||||
Revenue
|
||||||||||||||||
Resident fees
|
||||||||||||||||
Retirement Centers
|
$
|
169,990
|
$
|
164,409
|
$
|
5,581
|
3.4
|
%
|
||||||||
Assisted Living
|
613,017
|
611,838
|
1,179
|
0.2
|
%
|
|||||||||||
CCRCs – Rental
|
148,225
|
151,561
|
(3,336
|
)
|
(2.2
|
)%
|
||||||||||
Brookdale Ancillary Services
|
123,336
|
116,170
|
7,166
|
6.2
|
%
|
|||||||||||
Total resident fees
|
1,054,568
|
1,043,978
|
10,590
|
1.0
|
%
|
|||||||||||
Management services
(1)
|
204,262
|
194,206
|
10,056
|
5.2
|
%
|
|||||||||||
Total revenue
|
1,258,830
|
1,238,184
|
20,646
|
1.7
|
%
|
|||||||||||
Expense
|
||||||||||||||||
Facility operating expense
|
||||||||||||||||
Retirement Centers
|
95,236
|
92,365
|
2,871
|
3.1
|
%
|
|||||||||||
Assisted Living
|
378,932
|
388,479
|
(9,547
|
)
|
(2.5
|
)%
|
||||||||||
CCRCs – Rental
|
114,631
|
115,701
|
(1,070
|
)
|
(0.9
|
)%
|
||||||||||
Brookdale Ancillary Services
|
104,304
|
98,446
|
5,858
|
6.0
|
%
|
|||||||||||
Total facility operating expense
|
693,103
|
694,991
|
(1,888
|
)
|
(0.3
|
)%
|
||||||||||
General and administrative expense
|
90,695
|
89,545
|
1,150
|
1.3
|
%
|
|||||||||||
Transaction costs
|
441
|
421
|
20
|
4.8
|
%
|
|||||||||||
Facility lease expense
|
92,682
|
91,338
|
1,344
|
1.5
|
%
|
|||||||||||
Depreciation and amortization
|
133,394
|
225,645
|
(92,251
|
)
|
(40.9
|
)%
|
||||||||||
Asset impairment
|
4,152
|
—
|
4,152
|
NM
|
||||||||||||
Costs incurred on behalf of managed communities
|
186,076
|
179,367
|
6,709
|
3.7
|
%
|
|||||||||||
Total operating expense
|
1,200,543
|
1,281,307
|
(80,764
|
)
|
(6.3
|
)%
|
||||||||||
Income (loss) from operations
|
58,287
|
(43,123
|
)
|
101,410
|
235.2
|
%
|
||||||||||
Interest income
|
728
|
382
|
346
|
90.6
|
%
|
|||||||||||
Interest expense
|
(96,604
|
)
|
(96,641
|
)
|
(37
|
)
|
NM
|
|||||||||
Debt modification and extinguishment costs
|
(186
|
)
|
—
|
186
|
NM
|
|||||||||||
Equity in earnings (loss) of unconsolidated ventures
|
338
|
(672
|
)
|
1,010
|
150.3
|
%
|
||||||||||
Other non-operating income
|
2,069
|
2,654
|
(585
|
)
|
(22.0
|
)%
|
||||||||||
Income (loss) before income taxes
|
(35,368
|
)
|
(137,400
|
)
|
(102,032
|
)
|
(74.3
|
)%
|
||||||||
(Provision) benefit for income taxes
|
(123
|
)
|
52,593
|
(52,716
|
)
|
(100.2
|
)%
|
|||||||||
Net income (loss)
|
(35,491
|
)
|
(84,807
|
)
|
(49,316
|
)
|
(58.2
|
)%
|
||||||||
Net (income) loss attributable to noncontrolling interest
|
41
|
260
|
(219
|
)
|
(84.2
|
)%
|
||||||||||
Net income (loss) attributable to Brookdale Senior Living Inc. common stockholders
|
$
|
(35,450
|
)
|
$
|
(84,547
|
)
|
$
|
(49,097
|
)
|
(58.1
|
)%
|
|
Three Months Ended
June 30,
|
|||||||||||||||
|
2016
|
2015
|
Increase
(Decrease)
|
% Increase
(Decrease)
|
||||||||||||
Selected Operating and Other Data:
|
||||||||||||||||
Total number of communities (period end)
|
1,114
|
1,136
|
(22
|
)
|
(1.9
|
)%
|
||||||||||
Total units operated
(2)
|
||||||||||||||||
Period end
|
106,751
|
109,319
|
(2,568
|
)
|
(2.3
|
)%
|
||||||||||
Weighted average
|
107,135
|
109,548
|
(2,413
|
)
|
(2.2
|
)%
|
||||||||||
Owned/leased communities units
(2)
|
||||||||||||||||
Period end
|
80,519
|
82,519
|
(2,000
|
)
|
(2.4
|
)%
|
||||||||||
Weighted average
|
80,700
|
82,522
|
(1,822
|
)
|
(2.2
|
)%
|
||||||||||
Owned/leased communities occupancy rate (weighted average)
|
85.8
|
%
|
86.5
|
%
|
(0.7
|
)%
|
(0.8
|
)%
|
||||||||
Senior Housing average monthly revenue per unit
(3)
|
$
|
4,476
|
$
|
4,331
|
$
|
145
|
3.3
|
%
|
||||||||
|
||||||||||||||||
Selected Segment Operating and Other Data:
|
||||||||||||||||
Retirement Centers
|
||||||||||||||||
Number of communities (period end)
|
95
|
98
|
(3
|
)
|
(3.1
|
)%
|
||||||||||
Total units
(2)
|
||||||||||||||||
Period end
|
17,095
|
17,268
|
(173
|
)
|
(1.0
|
)%
|
||||||||||
Weighted average
|
17,095
|
17,279
|
(184
|
)
|
(1.1
|
)%
|
||||||||||
Occupancy rate (weighted average)
|
88.9
|
%
|
88.4
|
%
|
0.5
|
%
|
0.6
|
%
|
||||||||
Senior Housing average monthly revenue per unit
(3)
|
$
|
3,727
|
$
|
3,589
|
$
|
138
|
3.8
|
%
|
||||||||
Assisted Living
|
||||||||||||||||
Number of communities (period end)
|
818
|
833
|
(15
|
)
|
(1.8
|
)%
|
||||||||||
Total units
(2)
|
||||||||||||||||
Period end
|
53,459
|
54,673
|
(1,214
|
)
|
(2.2
|
)%
|
||||||||||
Weighted average
|
53,521
|
54,700
|
(1,179
|
)
|
(2.2
|
)%
|
||||||||||
Occupancy rate (weighted average)
|
85.3
|
%
|
86.4
|
%
|
(1.1
|
)%
|
(1.3
|
)%
|
||||||||
Senior Housing average monthly revenue per unit
(3)
|
$
|
4,478
|
$
|
4,316
|
$
|
162
|
3.8
|
%
|
||||||||
CCRCs - Rental
|
||||||||||||||||
Number of communities (period end)
|
43
|
46
|
(3
|
)
|
(6.5
|
)%
|
||||||||||
Total units
(2)
|
||||||||||||||||
Period end
|
9,965
|
10,578
|
(613
|
)
|
(5.8
|
)%
|
||||||||||
Weighted average
|
10,084
|
10,543
|
(459
|
)
|
(4.4
|
)%
|
||||||||||
Occupancy rate (weighted average)
|
83.7
|
%
|
83.6
|
%
|
0.1
|
%
|
0.1
|
%
|
||||||||
Senior Housing average monthly revenue per unit
(3)
|
$
|
5,812
|
$
|
5,697
|
$
|
115
|
2.0
|
%
|
||||||||
Management Services
|
||||||||||||||||
Number of communities (period end)
|
158
|
159
|
(1
|
)
|
(0.6
|
)%
|
||||||||||
Total units
(2)
|
||||||||||||||||
Period end
|
26,232
|
26,800
|
(568
|
)
|
(2.1
|
)%
|
||||||||||
Weighted average
|
26,435
|
27,026
|
(591
|
)
|
(2.2
|
)%
|
||||||||||
Occupancy rate (weighted average)
|
86.8
|
%
|
85.2
|
%
|
1.6
|
%
|
1.9
|
%
|
||||||||
Brookdale Ancillary Services
|
||||||||||||||||
Outpatient Therapy treatment codes
|
476,530
|
667,836
|
(191,306
|
)
|
(28.6
|
)%
|
||||||||||
Home Health average census
|
16,126
|
13,884
|
2,242
|
16.1
|
%
|
(1) | Management services segment revenue includes management fees and reimbursements for which we are the primary obligor of costs incurred on behalf of managed communities. |
(2) | Period end units operated excludes equity homes. Weighted average units operated represents the average units operated during the period, excluding equity homes. |
(3) | Senior Housing average monthly revenue per unit represents the average of the total monthly resident fee revenues, excluding amortization of entrance fees and Brookdale Ancillary Services segment revenue, divided by average occupied units. |
(dollars in thousands, except average monthly revenue per unit)
|
Six Months Ended
June 30,
|
|||||||||||||||
2016
|
2015
|
Increase
(Decrease)
|
% Increase
(Decrease)
|
|||||||||||||
Statement of Operations Data:
|
||||||||||||||||
Revenue
|
||||||||||||||||
Resident fees
|
||||||||||||||||
Retirement Centers
|
$
|
339,416
|
$
|
327,895
|
$
|
11,521
|
3.5
|
%
|
||||||||
Assisted Living
|
1,230,287
|
1,229,182
|
1,105
|
0.1
|
%
|
|||||||||||
CCRCs – Rental
|
300,485
|
307,552
|
(7,067
|
)
|
(2.3
|
)%
|
||||||||||
Brookdale Ancillary Services
|
245,528
|
231,581
|
13,947
|
6.0
|
%
|
|||||||||||
Total resident fees
|
2,115,716
|
2,096,210
|
19,506
|
0.9
|
%
|
|||||||||||
Management services
(1)
|
406,270
|
389,855
|
16,415
|
4.2
|
%
|
|||||||||||
Total revenue
|
2,521,986
|
2,486,065
|
35,921
|
1.4
|
%
|
|||||||||||
Expense
|
||||||||||||||||
Facility operating expense
|
||||||||||||||||
Retirement Centers
|
190,213
|
185,327
|
4,886
|
2.6
|
%
|
|||||||||||
Assisted Living
|
775,392
|
782,317
|
(6,925
|
)
|
(0.9
|
)%
|
||||||||||
CCRCs – Rental
|
231,422
|
233,121
|
(1,699
|
)
|
(0.7
|
)%
|
||||||||||
Brookdale Ancillary Services
|
211,978
|
191,115
|
20,863
|
10.9
|
%
|
|||||||||||
Total facility operating expense
|
1,409,005
|
1,391,880
|
17,125
|
1.2
|
%
|
|||||||||||
General and administrative expense
|
183,316
|
179,075
|
4,241
|
2.4
|
%
|
|||||||||||
Transaction costs
|
1,291
|
7,163
|
(5,872
|
)
|
(82.0
|
)%
|
||||||||||
Facility lease expense
|
189,371
|
185,809
|
3,562
|
1.9
|
%
|
|||||||||||
Depreciation and amortization
|
260,531
|
446,072
|
(185,541
|
)
|
(41.6
|
)%
|
||||||||||
Asset impairment
|
7,527
|
—
|
7,527
|
—
|
||||||||||||
Loss on facility lease termination
|
—
|
76,143
|
(76,143
|
)
|
NM
|
|||||||||||
Costs incurred on behalf of managed communities
|
371,304
|
359,919
|
11,385
|
3.2
|
%
|
|||||||||||
Total operating expense
|
2,422,345
|
2,646,061
|
(223,716
|
)
|
(8.5
|
)%
|
||||||||||
Income (loss) from operations
|
99,641
|
(159,996
|
)
|
259,637
|
162.3
|
%
|
||||||||||
Interest income
|
1,430
|
809
|
621
|
76.8
|
%
|
|||||||||||
Interest expense
|
(193,507
|
)
|
(193,123
|
)
|
384
|
0.2
|
%
|
|||||||||
Debt modification and extinguishment costs
|
(1,296
|
)
|
(44
|
)
|
1,252
|
NM
|
||||||||||
Equity in earnings of unconsolidated ventures
|
1,356
|
812
|
544
|
67.0
|
%
|
|||||||||||
Other non-operating income
|
9,856
|
5,145
|
4,711
|
91.6
|
%
|
|||||||||||
Income (loss) before income taxes
|
(82,520
|
)
|
(346,397
|
)
|
(263,877
|
)
|
(76.2
|
)%
|
||||||||
(Provision) benefit for income taxes
|
(1,788
|
)
|
130,881
|
(132,669
|
)
|
(101.4
|
)%
|
|||||||||
Net income (loss)
|
(84,308
|
)
|
(215,516
|
)
|
(131,208
|
)
|
(60.9
|
)%
|
||||||||
Net (income) loss attributable to noncontrolling interest
|
83
|
518
|
(435
|
)
|
(84.0
|
)%
|
||||||||||
Net income (loss) attributable to Brookdale Senior Living Inc. common stockholders
|
$
|
(84,225
|
)
|
$
|
(214,998
|
)
|
$
|
(130,773
|
)
|
(60.8
|
)%
|
Six Months Ended
June 30,
|
||||||||||||||||
2016
|
2015
|
Increase
(Decrease)
|
% Increase
(Decrease)
|
|||||||||||||
Selected Operating and Other Data:
|
||||||||||||||||
Total number of communities (period end)
|
1,114
|
1,136
|
(22
|
)
|
(1.9
|
)%
|
||||||||||
Total units operated
(2)
|
||||||||||||||||
Period end
|
106,751
|
109,319
|
(2,568
|
)
|
(2.3
|
)%
|
||||||||||
Weighted average
|
107,344
|
109,829
|
(2,485
|
)
|
(2.3
|
)%
|
||||||||||
Owned/leased communities units
(2)
|
||||||||||||||||
Period end
|
80,519
|
82,519
|
(2,000
|
)
|
(2.4
|
)%
|
||||||||||
Weighted average
|
80,820
|
82,723
|
(1,903
|
)
|
(2.3
|
)%
|
||||||||||
Owned/leased communities occupancy rate (weighted average)
|
86.0
|
%
|
86.9
|
%
|
(0.9
|
)%
|
(1.0
|
)%
|
||||||||
Senior Housing average monthly revenue per unit
(3)
|
$
|
4,481
|
$
|
4,318
|
$
|
163
|
3.8
|
%
|
||||||||
Selected Segment Operating and Other Data:
|
||||||||||||||||
Retirement Centers
|
||||||||||||||||
Number of communities (period end)
|
95
|
98
|
(3
|
)
|
(3.1
|
)%
|
||||||||||
Total units
(2)
|
||||||||||||||||
Period end
|
17,095
|
17,268
|
(173
|
)
|
(1.0
|
)%
|
||||||||||
Weighted average
|
17,095
|
17,324
|
(229
|
)
|
(1.3
|
)%
|
||||||||||
Occupancy rate (weighted average)
|
88.9
|
%
|
88.6
|
%
|
0.3
|
%
|
0.3
|
%
|
||||||||
Senior Housing average monthly revenue per unit
(3)
|
$
|
3,721
|
$
|
3,561
|
$
|
160
|
4.5
|
%
|
||||||||
Assisted Living
|
||||||||||||||||
Number of communities (period end)
|
818
|
833
|
(15
|
)
|
(1.8
|
)%
|
||||||||||
Total units
(2)
|
||||||||||||||||
Period end
|
53,459
|
54,673
|
(1,214
|
)
|
(2.2
|
)%
|
||||||||||
Weighted average
|
53,516
|
54,887
|
(1,371
|
)
|
(2.5
|
)%
|
||||||||||
Occupancy rate (weighted average)
|
85.4
|
%
|
86.8
|
%
|
(1.4
|
)%
|
(1.6
|
)%
|
||||||||
Senior Housing average monthly revenue per unit
(3)
|
$
|
4,485
|
$
|
4,299
|
$
|
186
|
4.3
|
%
|
||||||||
CCRCs - Rental
|
||||||||||||||||
Number of communities (period end)
|
43
|
46
|
(3
|
)
|
(6.5
|
)%
|
||||||||||
Total units
(2)
|
||||||||||||||||
Period end
|
9,965
|
10,578
|
(613
|
)
|
(5.8
|
)%
|
||||||||||
Weighted average
|
10,209
|
10,512
|
(303
|
)
|
(2.9
|
)%
|
||||||||||
Occupancy rate (weighted average)
|
84.0
|
%
|
84.8
|
%
|
(0.8
|
)%
|
(0.9
|
)%
|
||||||||
Senior Housing average monthly revenue per unit
(3)
|
$
|
5,801
|
$
|
5,721
|
$
|
80
|
1.4
|
%
|
||||||||
Management Services
|
||||||||||||||||
Number of communities (period end)
|
158
|
159
|
(1
|
)
|
(0.6
|
)%
|
||||||||||
Total units
(2)
|
||||||||||||||||
Period end
|
26,232
|
26,800
|
(568
|
)
|
(2.1
|
)%
|
||||||||||
Weighted average
|
26,524
|
27,106
|
(582
|
)
|
(2.1
|
)%
|
||||||||||
Occupancy rate (weighted average)
|
86.9
|
%
|
85.9
|
%
|
1.0
|
%
|
1.2
|
%
|
||||||||
Brookdale Ancillary Services
|
||||||||||||||||
Outpatient Therapy treatment codes
|
986,181
|
1,304,249
|
(318,068
|
)
|
(24.4
|
)%
|
||||||||||
Home Health average census
|
16,308
|
13,826
|
2,482
|
18.0
|
%
|
(1) | Management services segment revenue includes management fees and reimbursements for which we are the primary obligor of costs incurred on behalf of managed communities. |
(2) | Period end units operated excludes equity homes. Weighted average units operated represents the average units operated during the period, excluding equity homes. |
(3) | Senior Housing average monthly revenue per unit represents the average of the total monthly resident fee revenues, excluding amortization of entrance fees and Brookdale Ancillary Services segment revenue, divided by average occupied units. |
Six Months Ended
June 30,
|
||||||||
2016
|
2015
|
|||||||
Net cash provided by operating activities
|
$
|
177,839
|
$
|
110,824
|
||||
Net cash used in investing activities
|
(156,736
|
)
|
(376,497
|
)
|
||||
Net cash (used in) provided by financing activities
|
(70,079
|
)
|
240,086
|
|||||
Net decrease in cash and cash equivalents
|
(48,976
|
)
|
(25,587
|
)
|
||||
Cash and cash equivalents at beginning of period
|
88,029
|
104,083
|
||||||
Cash and cash equivalents at end of period
|
$
|
39,053
|
$
|
78,496
|
•
|
cash balances on hand;
|
•
|
cash flows from operations;
|
•
|
proceeds from our credit facilities;
|
•
|
funds generated through unconsolidated venture arrangements;
|
•
|
proceeds from mortgage financing, refinancing of various assets or sale-leaseback transactions; and
|
•
|
funds raised in the debt or equity markets and proceeds from the selective disposition of underperforming and/or non-core assets.
|
•
|
working capital;
|
•
|
operating costs such as employee compensation and related benefits, general and administrative expense and supply costs;
|
•
|
debt service and lease payments;
|
•
|
acquisition consideration and transaction and integration costs;
|
•
|
capital expenditures and improvements, including the expansion, renovation, redevelopment and repositioning of our current communities and the development of new communities;
|
•
|
cash collateral required to be posted in connection with our financial instruments;
|
•
|
purchases of common stock under our share repurchase authorizations;
|
•
|
other corporate initiatives (including integration, information systems, branding and other strategic projects); and
|
•
|
prior to 2009, dividend payments.
|
•
|
working capital;
|
•
|
operating costs such as employee compensation and related benefits, general and administrative expense and supply costs;
|
•
|
debt service and lease payments;
|
•
|
acquisition consideration and transaction and integration costs;
|
•
|
capital expenditures and improvements, including the expansion, renovation, redevelopment and repositioning of our existing communities;
|
•
|
cash funding needs of our unconsolidated ventures for operating, capital expenditure and financing needs; and
|
•
|
other corporate initiatives (including information systems and other strategic projects).
|
Actual Six Months Ended
June 30, 2016
|
Anticipated 2016 Range
|
|||||||
Recurring
|
$
|
31.3
|
$
|
74.0 - 81.0
|
||||
Less: reimbursements
|
(4.3
|
)
|
(9.0 - 11.0
|
)
|
||||
Net recurring
(1)
|
27.0
|
65.0 - 70.0
|
||||||
Net EBITDA-enhancing / Major Projects
(2)
|
61.1
|
115.0 - 120.0
|
||||||
Corporate, integration and other
(3)
|
27.7
|
50.0 - 55.0
|
||||||
Non-development capital expenditures
|
115.8
|
230.0 - 245.0
|
||||||
Development capital expenditures (Net Program Max
(4)
)
|
10.7
|
45.0 - 45.0
|
||||||
Total capital expenditures
|
$
|
126.5
|
$
|
275.0 - 290.0
|
(1) | Payments are included in Cash From Facility Operations. |
(2) | Includes EBITDA-enhancing projects (primarily community renovations and apartment upgrades) and other major building infrastructure projects. Amount shown for the six months ended June 30, 2016 is the amount invested, net of third party lessor reimbursements of $12.8 million. Anticipated amounts shown for 2016 are amounts invested or anticipated to be invested, net of approximately $19.0 million to $22.0 million of lessor reimbursements received or anticipated to be received. |
(3) | Corporate, integration and other includes capital expenditures for information technology systems and equipment and expenditures supporting the expansion of our support platform and ancillary services programs. |
(4) | Includes community expansions and major repositioning or upgrade projects. Also includes de novo community developments. Amount shown for the six months ended June 30, 2016 is the amount invested, net of third party lessor reimbursements of $15.2 million. Anticipated amounts shown for 2016 are amounts invested or anticipated to be invested, net of approximately $35.0 million to $38.0 million of lessor reimbursements received or anticipated to be received. |
•
|
provision (benefit) for income taxes;
|
•
|
non-operating (income) expense items;
|
•
|
depreciation and amortization (including non-cash impairment charges);
|
•
|
(gain) loss on sale or acquisition of communities (including gain (loss) on facility lease termination);
|
•
|
straight-line lease expense (income), net of amortization of (above) below market rents;
|
•
|
amortization of deferred gain;
|
•
|
non-cash stock-based compensation expense; and
|
•
|
change in future service obligation.
|
•
|
the cash portion of interest expense, income tax (benefit) provision and non-recurring charges related to gain (loss) on sale of communities (or facility lease termination) and extinguishment of debt activities generally represent charges (gains), which may significantly affect our operating results; and
|
•
|
depreciation and amortization and asset impairment represent the wear and tear and/or reduction in value of our communities and other assets, which affects the services we provide to residents and may be indicative of future needs for capital expenditures.
|
|
Three Months Ended
June 30,
(1)
|
Six Months Ended
June 30,
(1)
|
||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
Net income (loss)
|
$
|
(35,491
|
)
|
$
|
(84,807
|
)
|
$
|
(84,308
|
)
|
$
|
(215,516
|
)
|
||||
Provision (benefit) for income taxes
|
123
|
(52,593
|
)
|
1,788
|
(130,881
|
)
|
||||||||||
Equity in (earnings) loss of unconsolidated ventures
|
(338
|
)
|
672
|
(1,356
|
)
|
(812
|
)
|
|||||||||
Debt modification and extinguishment costs
|
186
|
—
|
1,296
|
44
|
||||||||||||
Other non-operating income
|
(2,069
|
)
|
(2,654
|
)
|
(9,856
|
)
|
(5,145
|
)
|
||||||||
Interest expense
|
96,604
|
96,641
|
193,507
|
193,123
|
||||||||||||
Interest income
|
(728
|
)
|
(382
|
)
|
(1,430
|
)
|
(809
|
)
|
||||||||
Income (loss) from operations
|
58,287
|
(43,123
|
)
|
99,641
|
(159,996
|
)
|
||||||||||
Depreciation and amortization
|
133,394
|
225,645
|
260,531
|
446,072
|
||||||||||||
Asset impairment
|
4,152
|
—
|
7,527
|
—
|
||||||||||||
Loss on facility lease termination
|
—
|
—
|
—
|
76,143
|
||||||||||||
Straight-line lease expense (income)
|
(523
|
)
|
1,919
|
3,412
|
4,720
|
|||||||||||
Amortization of (above) below market lease, net
|
(1,733
|
)
|
(1,840
|
)
|
(3,466
|
)
|
(3,799
|
)
|
||||||||
Amortization of deferred gain
|
(1,093
|
)
|
(1,093
|
)
|
(2,186
|
)
|
(2,186
|
)
|
||||||||
Non-cash stock-based compensation expense
|
8,994
|
6,851
|
18,763
|
15,724
|
||||||||||||
Adjusted EBITDA
|
$
|
201,478
|
$
|
188,359
|
$
|
384,222
|
$
|
376,678
|
(1) | For the three and six months ended June 30, 2016, the calculation of Adjusted EBITDA includes integration, transaction, transaction-related and strategic project costs of $17.1 million and $37.1 million, respectively. For the three and six months ended June 30, 2015, the calculation of Adjusted EBITDA includes integration, transaction, transaction-related and strategic project costs of $29.0 million and $56.3 million, respectively. Integration costs include transition costs associated with the Emeritus merger and organizational restructuring (such as severance and retention payments and recruiting expenses), third party consulting expenses directly related to the integration of Emeritus (in areas such as cost savings and synergy realization, branding and technology and systems work), and internal costs such as training, travel and labor, reflecting time spent by Company personnel on integration activities and projects. Transaction and transaction-related costs include third party costs directly related to the acquisition of Emeritus, other acquisition and disposition activity, community financing and leasing activity and corporate capital structure assessment activities (including shareholder relations advisory matters), and are primarily comprised of legal, finance, consulting, professional fees and other third party costs. Strategic project costs include costs associated with certain strategic projects related to refining our strategy, building out enterprise-wide capabilities for the post-merger platform (including the EMR roll-out project) and reducing costs and achieving synergies by capitalizing on scale. |
•
|
changes in operating assets and liabilities;
|
•
|
gain (loss) on facility lease termination;
|
•
|
distributions from unconsolidated ventures from cumulative share of net earnings;
|
•
|
recurring capital expenditures, net;
|
•
|
lease financing debt amortization with fair market value or no purchase options;
|
•
|
proceeds from refundable entrance fees;
|
•
|
refunds of entrance fees;
|
•
|
CFFO of unconsolidated ventures; and
|
•
|
other.
|
•
|
CFFO does not represent cash available for dividends or discretionary expenditures, since we have mandatory debt service requirements and other non-discretionary expenditures not reflected in the measure;
|
•
|
the cash portion of non-recurring charges related to gain (loss) on lease termination and extinguishment of debt activities generally represent charges (gains), which may significantly affect our financial results;
|
•
|
CFFO of unconsolidated ventures does not represent cash available directly for use by our consolidated business.
|
|
Three Months Ended
June 30,
(1)
|
Six Months Ended
June 30,
(1)
|
||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
Net cash provided by operating activities
|
$
|
107,496
|
$
|
100,767
|
$
|
177,839
|
$
|
110,824
|
||||||||
Net cash used in investing activities
|
(82,288
|
)
|
(145,206
|
)
|
(156,736
|
)
|
(376,497
|
)
|
||||||||
Net cash (used in) provided by financing activities
|
(57,017
|
)
|
7,753
|
(70,079
|
)
|
240,086
|
||||||||||
Net decrease in cash and cash equivalents
|
$
|
(31,809
|
)
|
$
|
(36,686
|
)
|
$
|
(48,976
|
)
|
$
|
(25,587
|
)
|
||||
Net cash provided by operating activities
|
$
|
107,496
|
$
|
100,767
|
$
|
177,839
|
$
|
110,824
|
||||||||
Changes in operating assets and liabilities
|
10,420
|
547
|
38,560
|
16,972
|
||||||||||||
Refundable entrance fee received
|
611
|
550
|
1,146
|
586
|
||||||||||||
Entrance fee refunds disbursed
|
(617
|
)
|
(988
|
)
|
(1,745
|
)
|
(1,817
|
)
|
||||||||
Recurring capital expenditures, net
|
(13,668
|
)
|
(17,425
|
)
|
(26,949
|
)
|
(32,428
|
)
|
||||||||
Lease financing debt amortization with fair market value or no purchase options
|
(14,117
|
)
|
(12,756
|
)
|
(27,926
|
)
|
(25,195
|
)
|
||||||||
Loss on facility lease termination
|
—
|
—
|
—
|
76,143
|
||||||||||||
Distributions from unconsolidated ventures from cumulative share of net earnings
|
—
|
(950
|
)
|
—
|
(1,450
|
)
|
||||||||||
CFFO of unconsolidated ventures
|
15,939
|
11,177
|
31,293
|
25,390
|
||||||||||||
Cash From Facility Operations
|
$
|
106,064
|
$
|
80,922
|
$
|
192,218
|
$
|
169,025
|
(1) | For the three and six months ended June 30, 2016, the calculation of CFFO includes integration, transaction, transaction-related and strategic project costs of $17.3 million and $38.3 million (including $1.2 million of debt modification costs excluded from Adjusted EBITDA). For the three and six months ended June 30, 2015, the calculation of CFFO includes integration, transaction, transaction-related and strategic project costs of $29.0 million and $56.3 million, respectively. Integration costs include transition costs associated with the Emeritus merger and organizational restructuring (such as severance and retention payments and recruiting expenses), third party consulting expenses directly related to the integration of Emeritus (in areas such as cost savings and synergy realization, branding and technology and systems work), and internal costs such as training, travel and labor, reflecting time spent by Company personnel on integration activities and projects. Transaction and transaction-related costs include third party costs directly related to the acquisition of Emeritus, other acquisition and disposition activity, community financing and leasing activity and corporate capital structure assessment activities (including shareholder relations advisory matters), and are primarily comprised of legal, finance, consulting, professional fees and other third party costs. Strategic project costs include costs associated with certain strategic projects related to refining our strategy, building out enterprise-wide capabilities for the post-merger platform (including the EMR roll-out project) and reducing costs and achieving synergies by capitalizing on scale. |
(a)
|
Not applicable.
|
(b)
|
Not applicable.
|
(c)
|
The following table contains information regarding purchases of our common stock made during the quarter ended June 30, 2016 by or on behalf of the Company or any ''affiliated purchaser,'' as defined by Rule 10b-18(a)(3) of the Exchange Act:
|
Period
|
Total
Number of
Shares
Purchased (1)
|
|
|
Average
Price Paid
per Share
|
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs
|
|
|
Maximum Number of
Shares that May Yet Be
Purchased Under the
Plans or Programs (2)
|
|
|||||
4/1/2016 - 4/30/2016
|
-
|
-
|
-
|
-
|
||||||||||||
5/1/2016 - 5/31/2016
|
128
|
18.03
|
-
|
-
|
||||||||||||
6/1/2016 - 6/30/2016
|
2,010
|
15.44
|
-
|
-
|
||||||||||||
Total
|
|
|
2,138
|
15.60
|
|
|
-
|
|
|
|
-
|
|
(1)
|
Consists entirely of shares withheld to satisfy tax liabilities due upon the vesting of restricted stock.
|
(2)
|
See Note 14 to the consolidated financial statements contained in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on February 12, 2016, which is incorporated herein by reference, for information regarding our share repurchase program. No shares were purchased pursuant to this authorization during the six months ended June 30, 2016. As of June 30, 2016, approximately $82.4 million remains available under this share repurchase authorization.
|
|
BROOKDALE SENIOR LIVING INC.
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
By:
|
/s/ Lucinda M. Baier
|
|
|
Name:
|
Lucinda M. Baier
|
|
|
Title:
|
Chief Financial Officer
(Principal Financial Officer)
|
|
|
Date:
|
August 9, 2016
|
|
|
|
|
|
Exhibit No.
|
Description
|
|
2.1
|
Agreement and Plan of Merger, dated as of February 20, 2014, by and among Brookdale Senior Living Inc. (the "Company"), Emeritus Corporation and Broadway Merger Sub Corporation (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on February 21, 2014 (File No. 001-32641)).
|
|
2.2
|
Master Contribution and Transactions Agreement, dated as of April 23, 2014, by and between the Company and HCP, Inc. (incorporated by reference to Exhibit 2.2 to the Company's Quarterly Report on Form 10-Q filed on August 11, 2014 (File No. 001-32641)).
|
|
3.1
|
Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K filed on February 26, 2010 (File No. 001-32641)).
|
|
3.2
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated July 30, 2014 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on August 5, 2014 (File No. 001-32641)).
|
|
3.3
|
Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on July 3, 2012 (File No. 001-32641)).
|
|
4.1
|
Form of Certificate for common stock (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-1 (Amendment No. 3) filed on November 7, 2005 (File No. 333-127372)).
|
|
4.2
|
Indenture, dated as of June 14, 2011, between the Company and American Stock Transfer & Trust Company, LLC, as Trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on June 14, 2011 (File No. 001-32641)).
|
|
4.3
|
Supplemental Indenture, dated as of June 14, 2011, between the Company and American Stock Transfer & Trust Company, LLC, as Trustee (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on June 14, 2011 (File No. 001-32641)).
|
|
4.4
|
Form of 2.75% Convertible Senior Note due 2018 (included as part of Exhibit 4.3).
|
|
10.1
|
Form of Outside Director Restricted Stock Unit Agreement under the Brookdale Senior Living Inc. 2014 Omnibus Incentive Plan.
|
|
10.2
|
Addendum to Offer Letter dated April 6, 2016 between the Company and Labeed S. Diab (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 12, 2016 (File No. 001-32641)).
|
|
10.3
|
Addendum to Offer Letter dated April 6, 2016 between the Company and Lucinda M. Baier (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on April 12, 2016 (File No. 001-32641)).
|
|
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS
|
XBRL Instance Document.
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Brookdale Senior Living Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: August 9, 2016
|
/s/ T. Andrew Smith
|
|
T. Andrew Smith
|
||
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Brookdale Senior Living Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Desi
g
ned such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: August 9, 2016
|
/s/ Lucinda M. Baier
|
|
Lucinda M. Baier
|
||
Chief Financial Officer
|
/s/ T. Andrew Smith
|
||
Name:
|
T. Andrew Smith
|
|
Title:
|
President and Chief Executive Officer
|
|
Date:
|
August 9, 2016
|
/s/ Lucinda M. Baier
|
||
Name:
|
Lucinda M. Baier
|
|
Title:
|
Chief Financial Officer
|
|
Date:
|
August 9, 2016
|